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Bythice
Keltner Channel
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This is an indicator of Moomoo trading software.
This volatility-based indicator uses EMA + ATR bands to track trends and reversals:
- Middle Line (ML): 20-day EMA, showing the core trend direction.
- Upper/Lower Bands (UB/LB): ML ± 2×ATR (Average True Range), adjusting channel width based on market volatility.
- Key Functions:
- Trend Following: Price breaking outside bands signals trend acceleration.
- Overbought/Oversold: Price bouncing between bands suggests potential reversals.
- Reversal Alert: Price returning inside after a breakout indicates weakening momentum.
Trading Rules
| Scenario | Signal | Action |
|---|---|---|
| Trend strengthening | Price breaks through the upper track (UB) and maintains | Go long/hold when price breaks above UB |
| Trend reversal | Price falls below the lower track (LB) and then returns to the channel | Take profit if price re-enters channel from below |
| Range oscillation | Price repeatedly touches UB/LB in the channel | Trade reversals at UB/LB with caution |
| Channel narrowing | The distance between UB and LB continues to narrow | Prepare for volatility surge |
Key Advantages
① Dynamic: ATR adapts to changing volatility
② Versatile: Works in trends and ranges
③ Visual: Cleanly marks support/resistance levels
For Beginners
In trends: Follow the breakout direction
In ranges: Use RSI/MACD to filter false signals
Operation instructions
Learn to verify the power of this indicator through the historical K-line indicator charts of the following two stocks PLTR and CLS.
Let’s take a look at this indicator formula:
ML:EMA(CLOSE,20),COLOR96C3D9,LINETHICK2;
TR1:=MAX(MAX((HIGH-LOW),ABS(REF(CLOSE,1)-HIGH)),ABS(REF(CLOSE,1)-LOW));
ATR1:=MA(TR1,14);
UB:ML+2*ATR1,COLOR96C3D9,LINETHICK2;
LB:ML-2*ATR1,COLOR96C3D9,LINETHICK2;
